Toledo Ohio MF Investment Assumptions

2 Replies

I've been presented with a 500 unit multifamily investment opportunity in the Ottawa area of Toledo OH and wanted feedback from anyone that's invested in the area.  

Has anyone invested in the Toledo market and if so what do they think about:

1. Exit cap of 7% in year 5

2, Buying property at about a 9 cap

3. Current rents average $260 (60% below market?) Renovations are planned (about 50% of purchase price is budget for renovation)

4, Getting $.80 per foot for rent after renovation (example getting $675 for a 2BR 1 BA 850 SqF apt)

5. Having $36K per unit in total cost after renovation

Thanks

@Mark Robertson , it really depends on the area. If they are getting $260 in rent right now I'm guessing it's in a pretty rough part of town. Those properties always trade with a huge risk premium built in, meaning that even though a property may be worth $xx @ a 7 cap and the rest of Toledo is trading at a 7 cap, properties in rougher areas seem to have a ceiling of about $25k per unit, no matter what the cash flow looks like. 

Feel free to PM me with more specifics. I can give you my two cents.

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